Generex Files To Raise Cash (GNBT)
You have seen us talk about companies in the BioHealth and biotech space after big pops of news lately. But some companies are also just raising cash, or leaving room to raise cash if needed. It is the second group that today’s filing from Generex Biotechnology Corp. (NASDAQ: GNBT) for up to $150 million falls into.
What is interesting here is that this is effectively the same size of the company today. Generex has a market cap after a 6.8% gain to $0.63 today of only about $156 million. Its 52-week trading range is $0.08 to $1.14 and the average daily volume is only about 2.94 million shares.
The company may or may not sell shares, because this filing is to replace an existing shelf registration:
- “The Registrant previously filed a Registration Statement on Form S-3 (File No. 333-139637) on December 22, 2006 and amended it on January 12, 2007 (the “Prior Registration Statement”). The Prior Registration Statement originally registered up to an aggregate dollar amount of $150,000,000 of the Registrant’s common stock, preferred stock, warrants and/or units consisting of two or more of any such securities. This Registration Statement is intended to renew and replace the Prior Registration Statement, and the Prior Registration Statement will be terminated upon the effectiveness of this Registration Statement.”
It lists the use of proceeds as:
- “for general corporate purposes, including to continue the clinical trials of, and commercialization and manufacturing of, our oral insulin formulation, in the research and development of other products, and for general and administrative expenses. We may also issue the securities offered under this prospectus in connection with product license and supply agreements, research collaboration agreements and to our commercial vendors and suppliers in exchange for products and services.”
The $150 million is for any combination of common and preferred stock, warrants, and/or units. The company itself is very small. Its October-31 quarter end showed only $26.26 million in cash and equivalents and another $3.47 million in long-term investments.
Generex’s initial product is Generex Oral-lyn™ and is an oral insulin formulation for use in the treatment of diabetes. It has received regulatory approval in Ecuador, India, Lebanon and Algeria for the commercial marketing and sale of Generex Oral-lyn™ and it has initiated Phase III clinical trials for this product and has patients enrolled in clinical sites in the United States, Canada, Bulgaria, Poland, Romania, Russia and Ukraine.
JON C. OGG
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